Make In India, Compete Globally

Make In India, Compete Globally

Erich Nesselhauf, MD and CEO, Daimler India Commercial Vehicles, is convinced that manufacturing in India has two big plusses; One, tap into the enormous potential of the domestic market and two, build India-centric trucks that can be exported to global markets with similar market needs

“It has been just three and a half years since we launched our first product in this market,” recalls Erich Nesselhauf, MD and CEO of the company, and since then, there has been no looking back for Daimler India Commercial Vehicles (DICV), a 100 per cent subsidiary of Daimler AG of Stuttgart, Germany. From building its truck and bus plant, introducing over 20 products and having over 30,000 BharatBenz trucks on Indian roads, the company has come a long way since its inception in India in 2009 and established itself as a  prominent commercial vehicle player in the country. With a manufacturing facility at Oragadam, near Chennai, which houses its truck and bus plant, DICV currently produces and sells a range of 9 ton to 49 ton trucks for the Indian market as BharatBenz and FUSO trucks for exports to markets in South East Asia, Africa, the Middle East and Latin America. Under its bus division, the company will produce and sell BharatBenz buses and Mercedes-Benz buses for the Indian market and produce chassis for exports. It adapts the best of technology from its global parent’s portfolio and offers Made-in-India trucks for its customers.

While it has established itself as a prominent player in the commercial vehicle industry, it does face stiff competition in the domestic market and, hence, aims to improve its products and customer service functions,  with a renewed focus on the launch of new versions of its medium and heavy duty trucks.

In this story, Erich Nesselhauf shares his thoughts on the impact of the Make in India campaign and the role DICV is playing in contributing to manufacturing in India and the employment opportunities it is offering through its facilities.

The ‘Make in India’ Initiative

“Overall, the ‘Make in India’ campaign has been resonating well with manufacturers, encouraging growth and export strategies. The campaign’s ambitious targets demonstrate that the government has a clear plan where to go and understands the needs of the manufacturing sector,” states Nesselhauf.

He believes that the recent budget announced by the Government helps the industry on various fronts. One, the planned introduction of GST is likely to be a big boost for the economy.

“Streamlining of customs and excise duty structures will promote domestic value addition, so it is very much in line with what the campaign aims to achieve,” he adds.

From an infrastructure perspective, Nesselhauf says, “Looking at Rs 70,000 crore which the government has allocated for infrastructure projects, availability of money does not seem to be an issue.” However, a lot will depend on: one, what projects will receive funding to start with? Two, whether the funded projects are properly executed, as only this will provide the intended return on investment.

To aid in recruiting qualified blue-collar workers, daimler has introduced a two-year course based on the global german dual vocational education system, which provides theoretical knowledge as well as practical technical training

Making in India, for the world 

DICV team believes that the enormous potential offered by domestic market can be addressed while simultaneously developing substantial exports business. With a localisation rate of more than 85 percent, the Indian suppliers account for a major portion of company’s production in Chennai. “And we are not just using these parts for domestic production but are also exporting them to other units within the Daimler group on a global scale,” explains Nesselhauf.

Apart from the complete vehicles, bus chassis and vehicle kits, the company also exports Made-in-India parts and components to other units of the Daimler group around the globe. So far, it has exported more than four million parts from its plant in Oragadam. “This is a huge success which clearly shows that Made-in-India can compete on a global scale when you do it right,” says a proud Nesselhauf. It’s Made-in-India FUSO trucks is exported to more than 20 countries in less than two years, with more markets in the pipeline.

The company has invested Rs. 4,400 crores to build its truck plant over 400 acres in Oragadam, Chennai. “It has the largest and most advanced truck test track across South Asia,” says the MD. With the expansion of its product portfolio to buses, the company added another Rs. 425 crore for the bus plant. Currently, it has an annual capacity of up to 72,000 units at its truck plant depending on the shift model, and 1,500 units at the bus plant which is scalable to 4,000 units.

The company employs over 3000 people and has a dedicated training and development centre for its staff on the plant premises.  To aid in recruiting qualified blue-collar workers, it has introduced a two-year course based on the global German Dual Vocational Education System, which provides theoretical knowledge as well as practical technical training.

Where to from here?

DICV always looks at different methods to make processes more stable and improve quality. “So when we see a technology and a business case, we go for it. With the right technology in place, guidance from Daimler Trucks Asia and association with colleagues from MFTBC in Japan, DICV aims to increase its contribution to the global business. Its Indian-made FUSO trucks will play a key role in opening up important growth markets in Asia, Africa, and Latin America. The recently opened regional sales centres in Singapore, South Africa and Kenya will help in growing its business in these regions.

Poornima Kavlekar has been associated with The Smart CEO since the time of launch and is the Consulting Editor of the magazine. She has been writing for almost 20 years on a cross section of topics including stocks and personal finance and now, on entrepreneurship and growth enterprises. She is a trained Yoga Teacher, an avid endurance Cyclist and a Veena player.

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